Chapter 1 Problem 5-15
Requirement a
1. Accounts receivable 2,600,000
Sales (3,070,000 – 470,000) 2,600,000
2. Cash (2,455,000 – 1,455,000) 1,000,000
Accounts receivable 1,000,000
3. Cash 1,455,000
Sales discount 45,000
Accounts receivable (1,455,000/97%) 1,500,000
4. Allowance for doubtful accounts 20,000
Accounts receivable 20,000
5. Cash 470,000
Sales 470,000
6. Sales return and allowances 55,000
Accounts receivable 55,000
7. Sales return and allowances 10,000
Cash 10,000
8. Accounts receivable 5,000
Allowance for doubtful accounts 5,000
Cash 5,000
Accounts receivable 5,000
7. Doubtful accounts 50,000
Allowance for doubtful accounts 50,000
Credit sales 2,600,000
Less: Sales discount 45,000
Sales return and allowances 55,000 100,000
Net credit sales 2,500,000
Doubtful accounts (2,500,000 x 2%) 50,000
Requirement b
Accounts receivable 625,000
Less: Allowance for doubtful accounts 60,000
Net realizable value 565,000
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